Introduction

For over a decade now the music industry is struggling. I don’t think that there is a single reason for that, but the rise of the internet certainly had the biggest impact on that negative trend in recent times.

In the 21st century it is easier than ever to copy vast amounts of data around the globe while preserving its quality.

Compared to the physical world, where it would take ages to copy hundreds of Tapes or CDs, copying the same amount of information digitally just takes a few minutes. Or as Cory Doctorow put it in this talk: »Copying data will only get easier«.

And because music is “freely” available, 24/7 around the world through the internet, a lot of people don’t even consider paying for music anymore.

The music industry is quick at putting the blame on filesharing. Others would say that its the fault of the music industry who failed, even after many years, to understand the internet and its users. They would constantly try to make it harder to copy music by using DRM and other defensive technologies rather than accepting the digital reality and trying to make it as easy as possible to listen, share and pay for music everywhere at any time.

They are still trying to apply the same business model of physical copies to a world where you can create a new virtual instance of your product instantly.

If anything, they should be happy about the digital age, rather than trying to fight it.

But of course its not that easy. Lets take a look at how the music industry actually works.

Music Industry, what is it good for?

The way it used to work was this: Employees of the record labels would constantly look for new promising artists – promising to produce and sell hit records. Then they would do basically the same thing that investors do for start-up companies, invest money without knowing whether they will get it back.

They would invest money so the artist can focus on the music, pay the rent, can buy decent gear, rent a proper rehearsal room, get into a good recording studio for the first single or album, organize a tour, organize radio airplay time, get them into festivals maybe even shoot a music video. In essence they would invest to improve and promote the artists so that eventually he/she/them will become so popular that people will buy enough CDs to make up for the initial investment plus additional profits.

You can guess that this kind of investment can easily grow to tens or hundreds thousands of dollars if you think about the salaries of the people doing the actual work inside the record label, plus the gear, plus production costs in a studio, making the physical records and distributing them etc etc.

Just like with other investments there is a huge risk involved. As a rough estimate lets say 9 out of 10 artists never get successful enough to recoup the investment and only 1 out of 10 is successful enough to pay for the losses of the nine others, plus its own investment costs and some extra profit.

Obviously the record labels would love to have more hits and they try everything they can to make it happen by deciding which single is going to be released first or arguing with the artist about whether the music is conforming enough with the taste of the »mainstream«.

Many customers have a more naive view on this whole operation. When they go into a store and buy a CD there is this romantic idea that most of the money will end up with the artist and that you could make a decent living just by selling a couple of thousand CDs. In reality however most of the money goes to all the middle men and women who are between the customer in the record store and the artist. The record label will keep most of the revenue until the initial investment is balanced. From a CD that sells for 10$ the artist might only get a few cents, if any.

In a good record deal for a new band the label will get about 85% of all the revenue. The artist will have to pay back all the expenses and production costs from the remaining 15% before the artist will get any money in their pockets.

With all this in mind you can imagine that even if you are quite successful after signing a record label deal, its likely that you end up with just a regular job afterwards. Bands like the Beatles, Stones, Led Zeppelin, Pink Floyd, Queen or artists like Bob Dylan, David Bowie, Billy Holliday, Janis Joplin or Madonna – these are actually super rare and extreme exceptions.

So signing a deal with record label does not mean that you’ve made it. You have to work really hard and you also need a good amount of luck to survive.

In the end you get to work with professionals, you are getting paid for making music, you will burn lots of money and you’re giving up some control over the creative process and also about copy and distribution rights of your own work.

Although that might sound a bit negative it can be quite fun and it is exactly what made all those big bands and artists so famous. It is just worth knowing that theses artists also pay for so many more commercially unsuccessful artists which may have made this one record which you hold so dear and which became the soundtrack of your life.

Another essential piece of the grand picture is the way music was primarily distributed. Television and radio were the two main channels for promoting new music.

A band from a small town would have a really hard time to reach more people with their music. If you’re unknown its hard to get into venues because people just would not pay to see you.

Instead you would try to get a record deal because they have a huge promotion network with all the radio and tv stations, sometimes on a global scale. If you send a demo tape to a label and they decide to sign you, what you really get is a massive multiplication of exposure beyond what you could ever achieve yourself in a reasonable amount of time.

For a long time radio and tv were the primary source for people to discover new music. If a regional radio station plays your song, thousands of people will listen to it. This kind of immediate exposure is almost priceless and I think that this is really the biggest benefit of signing a deal with a record label.

Now back to the present

These days the reality is different. Record labels still sign artists and invest a lot of money to promote them but if people like something, they just download it for free from the internet. End of the story … at least in the one of the music industry. Still this is happening. Its not a myth. People download music (among other things) for free if they can. Not all, but a significant amount.

Some won’t even download it illegally, instead they will just listen to music through streaming services like Spotify which are free to a certain extend and which yield so little profit to the labels or the artists that it is almost like downloading it for free. Maybe this will improve over time but right now its just a drop of water on a hot stone.

There are also a lot of people buying music online. In fact digital is the only growing division at any record label but compared to the good old CD times it is still on a much lower level and does not yield enough money to compensate for the declining CD sales.

Even though most labels tried to cut back the production costs they still take a huge risk when they sign a new artist to ever get the money back. As a result the label deals now try to squeeze as much money out of the artist as possible by taking revenue shared of all the artists commercial activity.

Just as a reference you can expect that a new band today has production costs around 60.000 Euro for their first album on an “indie” label. With the current market it is almost impossible to get that money back if the album is not a huge success.

As an artist you are basically on your own, now more then ever.

Everybody in the industry, the labels, the promoters, the radio and tv stations, even though they get paid to help you, are to afraid to take any risks. They will still take your money though.

The only solution the labels came up with on their own is to criminalize the listener and potential customers by restricting the access to the music and to sue people for ridiculous amounts of money.

What is the solution then?

Independence. Take as much control over your work as possible and do as much as you can on your own.

Why? Because nobody in the world cares more about your music than you do!

The biggest cost for the label is the production and the promotion of your music – these days however you can do most of it on your own.

Step 0

Make music. Depending on how many people like it you can get really far on your own if you follow those advices instead of waiting for the record label magic to happen.

Step 1

Educate yourself. Buy books about recording and mixing music. By now there are so many great books available from professional producers which will give you enough knowledge to create good recordings on your own. When you are rehearsing you are also practicing your recording and production skills. Don’t wait for anybody to come and do the job for you. Do it yourself.

Look on youtube for tutorials, how to’s, tips and tricks from experienced people. It is all out there.

Yes you will need some money for equipment and yes you will need to invest a lot of time but if you’d sign a record label deal now it would take months if not years until your record is out and you’d waste a lot of time thinking »Oh I have a record deal and people are paid to take care of my stuff« when in fact these people rarely do anything in your interest. Over time you may spend 3.000 or 5.000€ or $ for various recording gear but it is not wasted. You get to keep the gear and the experience you gained along the way.

Step 2

Don’t wait for a record deal to sell your music. A lot of artists are afraid to put out their music on their website or on bandcamp because if the get a chance for a record deal the labels won’t like that. Do the opposite! Embrace the internet, put your music out if you feel like it. If you made something great and you want to share it with the world now then do it.

Don’t even care to get on streaming platforms in the beginning. They are all more or less under the control of the labels and you would be the luckiest person in the world if you can buy a box of beer from the revenues after a year or two.

Why? Lets say you pay 10$ for Spotify and you only listen to one artist for a whole month then Rihanna, Lady Gaga and Beyonce and all the other super stars will get 99.999999% of your 10$. Its because all the money, be it advertisement or subscriptions is thrown in a huge bucket and divided by play count. Its a system where you need to be big already to profit. Otherwise it will take you a looooong loooong time to get even one single dollar out of this model.

Step 3

Communicate with your fans. Have a blog, a website or a facebook page where people can follow what you are doing. Let them comment on your work and reply to feedback that you get. Make videos about yourself. Give people on the internet a way to get to know you and to relate to you. This is crucial if you want earn their support. Be good, be yourself and be honest.

Step 4

Provide multiple ways to support you financially. Put your music on bandcamp or similar platforms for a reasonable price and always allow to pay more. Don’t ask for it and don’t beg for it. Just enable people who love what you do and who want to support you to do so. Also offer a way to give you money that is not necessarily related to a release. If you have your own blog or website make use of services like paypal, flattr and centup but don’t push it on people – just provide channels for people who want to support you.

Step 5

Promote yourself. Don’t rely on other people to do that. For example you could use facebook ads to show people who like similar bands information about your music. You can try it out for really small money and you will point more people to your work. Show it to friends and fans and make it easy for them to share it via all kinds of social networks to their friends. Ask people kindly to listen to your stuff and share it, retweet it, like it or even promote it if they like it. Sending an email, writing a facebook or blog post is free.

Try to play on small festivals, play on open stages, play for friends, play on the street – get as much exposure on your own. In the beginning you can’t play clubs until you pay everybody off including the audience. So start small. If people like what they hear the will tell other people about it.

Step 6

Think for yourself and don’t just follow blindly these advices. Think about what you can do what the labels can’t do or are afraid to do.

Step 7

Talk about all this with people around you and help others get start by sharing your experience.

All those steps won’t help you of course if you don’t music which at least some people like other than that you’ll be much better off this way. Also realize that this is not a recipe for instant success. It will still take a long time to call yourself successful but you gain much from it.

If 3 people buy a song for 1$ each you will have made 3$ more than a signed artist after selling 1000 downloads on iTunes

Why pay for music?

Lastly, why should anyone pay for music? To support the artist in the most direct way possible. Give money to the artists you like so they can buy equipment and other essential things they need to make music. Give them money so they can make more music for you and are able to stay independant from the music industry.

Recommended Literature

• All You Need to Know About the Music Business
• Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age
• Mixing Secrets
• The Mixing Engineer’s Handbook
• The Recording Engineer’s Handbook
• Getting Pro: Methoden, Tricks und Hintergründe für professionelle Audioproduktionen (German only)
• Das Mikrofonbuch: Optimaler Einsatz im Studio und auf der Bühne (German only)

Request for Feedback

It took me a while to write all of this down and I probably forgot to mention some things and made mistakes along the way. Please let me know if you have any feedback, suggestions for improvement, additional literature or spelling corrections.